From the course: Introduction to ESG: Environmental, Social, and Governance

ESG reporting

From the course: Introduction to ESG: Environmental, Social, and Governance

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ESG reporting

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- [Instructor] ESG reporting is disclosing factual and relevant ESG data and information on commitments, initiatives, policies and progress along with associated ESG risks and how these risks are managed. In traditional financial reporting, public companies report revenues and expenses to inform investor decisions. ESG reporting is also increasingly used by investors and include a wide variety of metrics for decision-making in addition to financial disclosures. ESG reporting is anything but a PR exercise. Its purpose is to provide comparable and useful information to various key stakeholders. Reporting companies typically pick and choose one or more reporting formats among over a dozen common ESG reporting frameworks that best suit their motivations for disclosure. Available multiple ESG reporting options many times results in organizations spending a large portion of their resources on reporting to various frameworks. On the other hand, investors and other stakeholders are facing challenges to compare ESG performance and risk exposure across companies and industries as apples to apples since each reporting framework has its own set of metrics and methodologies. During my conversations with corporations that are just starting with their ESG reporting efforts, I always get the same question, which ESG reporting framework should we pursue? Well, if you're curious about the same thing, here are a few helpful tips. Companies should strategically choose the ESG reporting guidance or framework based on their priorities and motivations. It is a good idea to be very clear about the why question. Why are we reporting before starting? The second consideration is finding out what information key stakeholders are requesting for decision-making. And the next one is to answer this question, where do they get this information? Are they using a GRI-aligned CSR report, a third-party rating agency or maybe your website? Let's now take a look at what kind of ESG reporting frameworks are out there for consideration.

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